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Surprised by local housing costs? You shouldn't be

Jobs-housing imbalance has persisted for decades

Silicon Valley has long been a place of human ingenuity, where ever larger worlds of data are packed onto shrinking computer chips -- but it's also where cities have struggled for decades to solve a fairly simple housing problem.

"Tell me again why we create six times as much jobs as housing and then everybody says, 'I'm shocked, there's a housing shortage and the housing we have is expensive," said Santa Clara County Supervisor Joe Simitian of the development pattern he witnessed county-wide during the 1990s dot.com boom. "This is fairly basic stuff."

All the success and job growth of Silicon Valley -- especially in Palo Alto and Mountain View -- has caused a major unintended consequence: much higher prices for a limited supply of housing and an increased number of commuters on the area's roads.

The jobs-rich, housing-poor pattern of the 1990s boom is now a regular feature of Silicon Valley life, with new and overwhelming demand for limited housing from the likes of Google and Facebook instead of Sun Microsystems, Silicon Graphics and Hewlett Packard. In Google's hometown of Mountain View, for example, average rents for a two-bedroom, two-bathroom apartment have skyrocketed over the last two years from $2,250 to $2,981 a month, according to data firm Realfacts. Countywide, it's gone from $2,061 to $2,479. There is now 100-percent occupancy of the Madera luxury apartments across from Mountain View's downtown train station, where asking rents for a two-bedroom apartment are as high as $8,000 a month.

"When I tell people my father bought a home in Palo Alto on a single school teacher salary, they look at me like, 'You can't be that old,'" Simitian said. "It wasn't that long ago."

The influx of residents who can afford the new rents, and displace numerous longtime residents, is apparently causing resentment. And not just in places like San Francisco, where protests of Google's employee shuttles there have created buzz about the problem.

"This is my 13th year, and I've never heard as much resentment of others' prosperity," Simitian said of his regular meetings with constituents at the Mountain View farmer's market.

Too many jobs?

There are solutions to the problem, though most are unpopular, as anyone who attends City Council meetings can attest. Even the highest quality housing developments are regularly protested by neighbors, while large new office buildings for the likes of Samsung, Google, and Intuit have been consistently approved by the same City Council with little controversy over the last two years.

"Given our national culture, it's pretty hard to argue against jobs. Most places don't have jobs. People laugh at me when I say we have too many jobs. But that's what I've been arguing for over 40 years," said longtime Mountain View resident Lenny Siegel.

The problem reached a fever pitch during the 1990's dot.com boom. Mountain View saw nearly 16,000 new jobs created over that decade, reaching 77,330 jobs by 2000. Meanwhile the city saw only 3,300 new residents, reaching a population of 70,708. After a decade of slower job growth, the city appears to be on track to surpass the dot.com boom's record. Despite plenty of opposition to new housing over the last decade, the imbalance seems to have lessened. City planners say Mountain View now has almost 70,000 jobs and over 74,000 people, but there are plans in the works to add over 20,000 more jobs, with a million square feet of new offices approved for the Whisman area, and as a slew of office developments wait for a new precise plan to guide development of Google's neighborhood north of Highway 101 in 2015.

Former Mountain View city manager Bruce Liedstrand said he recalled plenty of discussions about the jobs-housing imbalance in the 1980s, but "no one ever did anything about it" except enact a maximum office density in North Bayshore and the Whisman area that has been largely tripled in the city's new 2030 general plan. He recalled the problem began when early tech companies like Fairchild Semiconductor developed in the 1960s and 1970s, overwhelming the suburban layout created in 1950s Mountain View.

Siegel recalled rent hikes were bad enough in the 1970s that he joined an unsuccessful effort to bring rent control to Mountain View. Landlords outspent the campaign 100 to 1, he said, and voters didn't approve it.

"In the '70s there were county-wide reports on the jobs-housing imbalance and it was taken seriously as a regional issue," Siegel said. "You don't see much of that nowadays."

Siegel showed the Voice a report from 1990, with data on the 1990 jobs-housing balance for cities in Santa Clara County in 1990 from the Association of Bay Area Governments. There were 1.54 jobs in Mountain View for every employed resident. In Palo Alto, the ratio was 2.08 jobs per employed resident. More recent reports examining such ratios could not be found for this story.

Perhaps the imbalance has come to be seen as too intractable to even discuss. Mountain View's City Council hasn't had a serious discussion about the issue in the past seven years, even as the city was creating its 2030 general plan, a blueprint for future development in Mountain View. While over 15,000 new jobs are being discussed for the North Bayshore area alone by 2030, the new general plan allows a maximum of 6,539 new homes in the city by the same date, mostly along a redeveloped El Camino Real and San Antonio corridor.

The same arguments

Mountain View has taken more action than many cities in the area to rectify the problem, rezoning commercial land for housing, increasing allowed housing densities, and subsidizing over 1,000 homes for lower-income residents. But the problem of high rents looms as large as ever.

Siegel recalled the argument against housing growth that council members used to make, which happens to be the same one often used today: "Basically the council would argue that we've done more than our share. We have a lot of apartments. Palo Alto doesn't have as many apartments or Los Altos doesn't have any apartments or very few. But that doesn't solve the problems of people who are living in cars or commuting four to five hours a day."

In Mountain View, a city where the majority of residents are renters, residents have consistently elected a City Council of homeowners, a majority of whom opposed the 1,000 new homes Google officials asked to build north of Highway 101. It's an area where Google, Intuit and others are set to rapidly grow, but where the council majority say homes would cause too many environmental impacts on wildlife and be too much like college dormitories.

In contrast, Simitian said that Palo Alto required 3,000 new homes when Stanford proposed 2 million square feet of new development.

"I said I can support all that but I want to require, not allow, the 3,000 units of housing," Simitian recalled of the proposal, telling Stanford that "as you grow your facilities, we need you to grow your housing supply." That plan was ultimately approved.

Council members have said they'd like a Stanford campus-like environment in North Bayshore, but whether any significant new housing policies or restrictions on office growth are in the cards for Mountain View remains to be seen. Three of the four city council members who have opposed housing in North Bayshore and often elsewhere, Margaret-Abe-Koga, Ronit Bryant and Jac Siegel (Siegel and Bryant were also the biggest opponents to North Bayshore office growth), will be forced out by term limits at the end of year. Candidates for their seats have yet to step forward.

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